Volkswagen AG lowered its 2026 fiscal year outlook due to significant profitability pressures. The automaker now expects an operating return on sales of approximately 1%. This figure represents a sharp decline from the previous forecast of 4.0% to 5.5%. Company shares closed down 8.31% on Friday following the announcement.
A €6 billion non-cash impairment related to Porsche AG drove the revised forecast. Volkswagen cited a deteriorating market environment in China as a primary factor. The company noted a faster-than-expected consumer shift toward lower-margin electric vehicles. Additional restructuring costs will likely reach €2 billion in the second half of the year.
Reports indicate the restructuring plan may include 4,100 job cuts at the Porsche brand. These reductions come in addition to previously announced staff cuts. The group now projects total 2026 sales revenue of about €315 billion. Volkswagen will release full third-quarter results on October 29, 2026.